Karnataka High Court
M/S. Meyer Organics Pvt. Ltd vs M/S. Scs Enterprises on 14 November, 2025
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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CMP No. 46 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 14TH DAY OF NOVEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
CIVIL MISC. PETITION NO. 46 OF 2025
BETWEEN:
M/S. MEYER ORGANICS PVT. LTD.,
SITUATED AT NO.10D 3RD MAIN
2ND PHASE PEENYA INDUSTRIAL AREA
BENGLARUU 560058
REP BY ITS PLANT MANAGER
MRS SARITHA
...PETITIONER
(BY SRI. ANIRUDH K A., ADVOCATE)
AND:
M/S. SCS ENTERPRISES
LOCATED AT PRERANA NILAYA
3RD CROSS GANAGASARAPPA LAYOUT
ANJANEYA SWAMY TEMPLE ROAD
THIPPENAHALLI NAGARASANDRA POST
Digitally signed BENGLARUU 560073
by SHWETHA REP BY ITS PROPRIETOR
RAGHAVENDRA
MR SATHISH B N
Location: HIGH ...RESPONDENT
COURT OF
KARNATAKA (BY SRI. ABHINAV RAMANAND A., ADVOCATE)
THIS CIVIL MISC. PETITION IS FILED UNDER SECTION 11(6)
OF ARBITRATION AND CONCILIATION ACT., PRAYING TO (I)
APPOINT A SOLE ARBITRATOR OR ARBITRATORS IN PURSUANCE OF
CLAUSE 17 OF ARBITRATION AGREEMENT DATED 1.04.2023
PRODUCED AS ANNEXURE - C3 AND ETC.
THIS PETITION, COMING ON FOR ADMISSION, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
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CMP No. 46 of 2025
HC-KAR
CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
ORAL ORDER
1. The petitioner is before this Court seeking for the
following reliefs;
(i) Appoint a sole Arbitrator or Arbitrators in pursuance
of clause 17 of Arbitration agreement dated 1.04.2023
produced as annexure - C3
(ii) Appoint the arbitration center, Bengaluru as the
Institution to conduct the arbitral proceedings.
(iii) Award cost s of this petition in favour of the
Petitioners.
(iv) Pass such other orders or relief that this Hon'ble
Court may deems fit and proper in the circumstance of
the case.
2. The petitioner and the Respondent entered into an
agreement on 01.04.2020, which was subsequently
renewed on 01.04.2022 and thereafter on
01.04.2023. The last of the agreement is governed
by an arbitration Clause in terms of Clause 17, which
is reproduced hereunder for easy reference;
17. If dispute between parties is not resolved then in
cases dispute of differences between parties will be
referred to arbitration as per the Arbitration and
Conciliation Act of 1996 subject to Bangalore
jurisdiction only.
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3. It is contended that the petitioner had made certain
payments to the Respondent, which the Respondent
was required to make payment to the workers, which
was not so made. Hence, the petitioner made
payment to the said workers directly. The petitioner
invoked the arbitration Clause on 24.10.2024 vide its
legal notice and called upon the Respondent to make
payment of the said amount paid to the Respondent.
Failure thereof, the petitioner had also indicated that
it is right to nominate the person named therein as
Arbitrator to arbitrate the dispute between the
parties.
4. The notice having been served, the Respondent
replied to the same vide their reply notice dated
28.11.2024 contending that there is no amount
which are due to be paid, the claim made by the
petitioner is without substance, etc.,
5. The petitioner had addressed one more notice and
called upon the Respondent to concur with the
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appointment of an arbitrator. There being no
concurrence the petitioner was constrained to
approach this Court.
6. Notice having been issued, Respondent have been
served and have entered an appearance.
7. Sri.Abhinav Ramanand.A., learned counsel for the
Respondent, having filed his statement of objection,
contends that;
7.1. The matter would have to be adjudicated before
the Industrial Tribunal, since the disputes arise
out of an industrial relationship between a
contractor, worker/s and principal employer
and as such, an arbitrator cannot be appointed.
7.2. He relies upon the decision of the Hon'ble Apex
Court in Booz Allen & Hamilton Inc. v. SBI
Home Finance Ltd.,1 more particularly para
35 thereof, which is reproduced hereunder for
easy reference;
1 (2011) 5 SCC 532
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35. The Arbitral Tribunals are private fora chosen
voluntarily by the parties to the dispute, to
adjudicate their disputes in place of courts and
tribunals which are public fora constituted under
the laws of the country. Every civil or commercial
dispute, either contractual or non-contractual,
which can be decided by a court, is in principle
capable of being adjudicated and resolved by
arbitration unless the jurisdiction of the Arbitral
Tribunals is excluded either expressly or by
necessary implication. Adjudication of certain
categories of proceedings are reserved by the
legislature exclusively for public fora as a matter of
public policy. Certain other categories of cases,
though not expressly reserved for adjudication by
public fora (courts and tribunals), may by
necessary implication stand excluded from the
purview of private fora. Consequently, where the
cause/dispute is inarbitrable, the Court where a
suit is pending, will refuse to refer the parties to
arbitration, under Section 8 of the Act, even if the
parties might have agreed upon arbitration as the
forum for settlement of such disputes.
7.3. By relying on Booz Allen & Hamilton Inc.'s
case, the submission is that where a remedy is
provided under a special statute, the
adjudication should be done under those
statutes and special tribunals created
thereunder and cannot be done by way of
arbitration, which is a private forum.
7.4. He relies upon the decision of the Hon'ble Apex
Court in Vidya Drolia v. Durga Trading
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Corpn.,2 para 76.4 thereof, which is
reproduced hereunder for easy reference;
76.4. (4) When the subject-matter of the
dispute is expressly or by necessary implication
non-arbitrable as per mandatory statute(s).
7.5. By relying on Vidya Drolia's case, his
submission in that the subject matter of dispute
is not arbitrable and as such cannot be referred
to arbitration.
7.6. Lastly, he relies upon the decision of the
Hon'ble Apex Court in National Insurance Co.
Ltd. v. Mastan,3 more particularly para 23 to
27 thereof, which are reproduced hereunder for
easy reference;
23. The "doctrine of election" is a branch of "rule of
estoppel", in terms whereof a person may be
precluded by his actions or conduct or silence when
it is his duty to speak, from asserting a right which
he otherwise would have had. The doctrine of
election postulates that when two remedies are
available for the same relief, the aggrieved party
has the option to elect either of them but not both.
Although there are certain exceptions to the same
rule but the same has no application in the instant
case.
2 (2021) 2 SCC 1
3 (2006) 2 SCC 641
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24. In Nagubai Ammal v. B. Shama Rao [1956 SCR
451 : AIR 1956 SC 593] it was stated: (SCR p.
470)
"It is clear from the above observations that the
maxim that a person cannot 'approbate and
reprobate' is only one application of the doctrine of
election, and that its operation must be confined to
reliefs claimed in respect of the same transaction
and to the persons who are parties thereto."
25. In C. Beepathumma v. Velasari
Shankaranarayana Kadambolithaya [(1964) 5 SCR
836 : AIR 1965 SC 241] it was stated: (SCR p.
850)
"The doctrine of election which has been applied in
this case is well settled and may be stated in the
classic words of Maitland--
'That he who accepts a benefit under a deed or Will
or other instrument must adopt the whole contents
of that instrument, must conform to all its
provisions and renounce all rights that are
inconsistent with it.'
(See Maitland's Lectures on Equity, Lecture 18.)
The same principle is stated in White and Tudor's
Leading Cases in Equity, Vol. (sic) 18th Edn. at p.
444 as follows:
'Election is the obligation imposed upon a party by
courts of equity to choose between two
inconsistent or alternative rights or claims in cases
where there is clear intention of the person from
whom he derives one that he should not enjoy
both.... That he who accepts a benefit under a deed
or Will must adopt the whole contents of the
instrument."
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(See also Prashant Ramachandra Deshpande v.
Maruti Balaram Haibatti [1995 Supp (2) SCC 539].)
26. Thomas, J. in P.R. Deshpande v. Maruti
Balaram Haibatti [(1998) 6 SCC 507] stated the
law thus: (SCC p. 511, para 8)
"8. The doctrine of election is based on the rule of
estoppel -- the principle that one cannot approbate
and reprobate inheres in it. The doctrine of
estoppel by election is one of the species of
estoppel in pais (or equitable estoppel) which is a
rule in equity. By that rule, a person may be
precluded by his actions or conduct or silence when
it is his duty to speak, from asserting a right which
he otherwise would have had." (See also
Devasahayam v. P. Savithramma [(2005) 7 SCC
653].)
27. The first Respondent having chosen the forum
under the 1923 Act for the purpose of obtaining
compensation against his employer cannot now fall
back upon the provisions of the 1988 Act therefor,
inasmuch as the procedure laid down under both
the Acts are different save and except those which
are covered by Section 143 thereof.
7.7. By relying on National Insurance Co. Ltd.,
case, he submits that the petitioner, having
approached the Deputy Labour Commissioner,
cannot also invoke the arbitration Clause.
7.8. By referring to Interplay Between
Arbitration Agreements under Arbitration
Act, 1996 & Stamp Act, 1899, In re,
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reported in (2024) 6 SCC 1, his submission is
that the issue as regards stamping of the
document would also have to be decided.
8. Heard Sri.Anirudh.K.R., learned counsel for the
petitioner and Sri.Abhinav Ramanand.A., learned
counsel for Respondent and perused papers.
9. Though, several judgments have been relied upon by
Sri.Abhinav Ramanand.A., learned counsel for
Respondent to indicate that there is a special statute
which is applicable, and as such, the matter would
have to be adjudicated by the Industrial Tribunal. I
am unable to agree with the same for the reason
that, in the present matter, the dispute which has
been raised by the petitioner is only the recovery of a
certain sum of money, which the petitioner has
stated to have paid to the Respondent.
10. The said amounts being required to be paid by the
Respondent to the workers, since the Respondent
allegedly did not make payment of the said amounts,
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the petitioner has directly paid to the workers.
Hence, the dispute as regards the payment to the
workers is no longer an issue requiring the
application of the Industrial Disputes Act, 1947, as
contended by learned counsel for the Respondent.
11. The dispute in the present matter is only for the
recovery of certain monies which are stated to be
advanced by the petitioner to the Respondent,
whether those monies are required to be refunded or
not and the grounds which are available to the
Respondent to deny such refund is always a defense
which could be raised by the Respondent to claim
before the Arbitrator, so appointed.
12. In that view of the matter, I pass the following;
ORDER
i. CMP is allowed.
ii. Sri. S.D.Babladi., a former District Judge of
the District Judiciary, State of Karnataka, is
appointed as a sole arbitrator to arbitrate the
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dispute between the parties under the aegis of
the Arbitration Centre attached to this Court.
iii. The Registry is directed to forward a copy of
this order to the Director, Arbitration &
Conciliation Centre for doing the needful.
iv. Since the order is passed in the presence of
both the counsels, the counsels are directed to
appear before the Director, Arbitration &
Conciliation Centre without requirement of any
notice at 2.30 p.m. on 2.12.2025.
v. All contentions are kept open.
SD/-
(SURAJ GOVINDARAJ)
JUDGE
